Systemair AB Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adela Dashian - Jefferies - Analyst : Good morning, Roland and Anders. My first question relates to the strong performance in North America. Could you maybe elaborate a bit about if there are any regional differences between Canada and the US. because I do know that you've also mentioned previously that there is an expectation that the residential segment in the US will also start to pick up again in coming months. But here, it was more driven by Canada. So is your offering different? Or is it more like a timing effect?

Question: Adela Dashian - Jefferies - Analyst : Got it. All right. And then maybe just on the topic of the election since you just mentioned it. How do you perceive that? And is there a potential tariff risk that could impact your operations in that market?

Question: Adela Dashian - Jefferies - Analyst : Okay. That's good to hear. And then maybe lastly on the profitability improvement, I thought it was quite impressive to deliver even margin of 11% despite the strategic decisions that you've taken through the quarter. Can you maybe provide us some more details on the new factor in Lithuania and how that is expected to impact your production capacity and maybe also market reach going forward?

Question: Adela Dashian - Jefferies - Analyst : Okay. And may maybe just lastly on the net debt levels coming down. How should we expect your growth strategy to progress going into next year? Are you still seeing good opportunities on the M&A front. And do you have a more robust pipeline now with the newly established head of M&A to be driving that going forward?

Question: Adela Dashian - Jefferies - Analyst : Okay. Interesting. Thank you. And congrats on the quarter.

Question: Carl Ragnerstam - Nordea Markets - Analyst : Hi, good morning. It's Carl from Nordea. Looking at SG&A, I mean, when I look at it adjusted, it's up 1.5% year over year, which is clearly less than organic volume growth in the quarter. When you look at your order intake and your current organization, how scalable would you say that your operating cost base is currently? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 8:00AM, SYSR.ST - Q2 2025 Systemair AB Earnings Call

Question: Carl Ragnerstam - Nordea Markets - Analyst : Okay. That is very clear. I can also see that you cut 60 employees in South Africa in the report. In annual report, you had 124 employees, so quite a big cut here. Are you exiting that country? Or how should be look at that?

Question: Carl Ragnerstam - Nordea Markets - Analyst : Okay. But, you have cut your FDs by 50%. Do you think that is enough to take that into profitability of that geography?

Question: Carl Ragnerstam - Nordea Markets - Analyst : Yeah, sure. And also looking at your order intake, I mean, pointing in the right direction as you're stating in the outlook. I mean you previously said that you have a healthy degree of quotations and good activities among the installers. But now, when I read what you've written is that it sounds like it's been converted into actual or firm orders now. So if you could give any comments on client or customer behaviors from installers as well as technical consultants. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 8:00AM, SYSR.ST - Q2 2025 Systemair AB Earnings Call And also, you mentioned the larger project. Is it projects that have been on pause for a period of time when rates were sort of higher? Or is it new projects coming in certain regions or end markets?

Question: Carl Ragnerstam - Nordea Markets - Analyst : Okay. That's very clear. Thank you so much.

Question: Lina Blume - Handelsbanken Capital Markets - Analyst : Good morning and thank you for taking my questions. And first of all, regarding the positive sales development in Norway, is it possible to say what has contributed to this development? And if it's in your view, temporary and short term and more just, I would say, signs of a recovery in the Norwegian market?

Question: Lina Blume - Handelsbanken Capital Markets - Analyst : So thank you for that. And then on profitability and while you reported an impressive operating margin Europe, the operating margin the rest of the segments came in at 4.1% I believe. Is it possible to give some color on what has led to this margin development in the regions outside of Europe? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 8:00AM, SYSR.ST - Q2 2025 Systemair AB Earnings Call

Question: Lina Blume - Handelsbanken Capital Markets - Analyst : Super. Thank you for that. That was all my questions.

Question: Douglas Lindahl - DNB Bank ASA - Analyst : Thanks for taking my questions. Just circling back to the Norway comment there briefly. Obviously, it seems to be very strong given all other markets or I guess, you comment that Finland and Denmark is down, I would expect Sweden also being down. So Norway must be very strong. And you said that there are some projects in there. Is that the majority of the growth from projects? Or can you just give some additional colors to Norway starting there?

Question: Douglas Lindahl - DNB Bank ASA - Analyst : Okay. Thanks for that color. And then on the topic of growth, North America, obviously, a significant step-up here organically. And I guess sort of similar question, is there a project mix that's driving this? And Anders, you already said in your presentation that we shouldn't probably expect this growth rate going forward. What sort of growth rate do you think we should expect then going forward?

Question: Douglas Lindahl - DNB Bank ASA - Analyst : So there's some inventory readjustments or stock here in the quarter, you think?

Question: Douglas Lindahl - DNB Bank ASA - Analyst : Okay. And then on the gross margin side, which is quite impressive, I think, again. Do you see even further upside here, I guess, with Western Europe potentially bouncing back? How sustainable do you see the gross margins? Or what sort of upside potentially you see further on the gross margin side?

Question: Douglas Lindahl - DNB Bank ASA - Analyst : Yeah, but the gross margin is slightly boosted by certain projects you mentioned here in the short term (multiple speakers) positives on the line.

Question: Douglas Lindahl - DNB Bank ASA - Analyst : Yeah. Okay. Thanks. That's those are my questions. Thank you.